About Issue

About the Issuer

Indian Railway (IRFC) Finance Company is a dedicated financing arm of the Ministry of Railways. Its sole objective is to raise money from the market to part finance the plan outlay of Indian Railways. The money so made available is used for acquisition of rolling stock assets and for meeting other developmental needs of the Indian Railways.

The borrowing programme of IRFC is guided by the requirements projected by Ministry of Railways. The company has successfully met the targeted borrowings year after year, through issue of both taxable and tax-free Bonds, term loans from banks/financial institutions and through off shore borrowings. IRFC also makes use of innovative financial instruments to diversify the debt portfolio and to minimize the cost. Its contribution to infrastructure build-up in Railways is very significant. Till 31st March, 2013, Rolling Stock assets- Locomotives, Coaches and Wagons- valued at Rs. 97,482 cr. have been added to the asset base of the Indian Railways with funding assistance from IRFC. IRFC’s funding has support technology infusion in the Railways and has enabled Ministry of Railways to purchase new generation Locomotives from General Motors (USA) alongwith transfer of technology and new generation Coaches from Germany for use in high speed/Shatabdi trains.

IRFC’s share in funding of the most productive high capacity wagons and high horse power locomotives is very significant. Acquisition of high capacity & efficient assets with IRFC funding has gone a long way in increasing traffic output and revenue growth over the years. Around 50% of the revenue earning rolling stock assets operating on the Indian Railways network is funded by IRFC.

Since its inception, IRFC has consistently earned profits and paid dividend adding upto Rs. 1668 crore till 31-03-2012 on a paid up capital of Rs. 500 crore which has been increased to Rs. 800 crore from 2nd June, 2009 and further to Rs. 1,091 crore during 2009-10. The networth of the Company stood at Rs. 5,699.8 crore as on 30.09.2012. . Dividend payments for the year 2005-06, 2006-07, 2007-08, 2008-09, 2009-10,2010-11 and 2011-12 are Rs. 150 crore, Rs. 160 crore, Rs. 100 crore, Rs. 100 crore, Rs. 100 crore and Rs. 100 crore respectively and are the highest ever paid by a Railway PSU.The networth of IRFC as on 30-09-2012 stood at 5,699.8 crore

The Company’s performance has been rated excellent for eleven years in a row by the Department of Public Enterprises. Specially worth mentioning is the ranking of IRFC among the top ten Government Undertakings for the last four years in succession. For the years 2001-02, 2002-03 and 2003-04, Company has received Award from the President of India, Prime Minister of India and Vice President of India respectively. For the year 2005-06, 2006-07, 2007-08 and 2009-10. the Company has achieved the Perfect Score of 1.

Credit Ratings: Domestic:During the financial year 2011-12, the Company was awarded the highest credit rating – “CRISIL AAA/Stable” by CRISIL, “CARE AAA” rating by CARE and “[ICRA] AAA” rating by ICRA.

International: Three international Credit Rating Agencies – Standard & Poor’s, Fitch and Moody’s – have awarded to IRFC “BBB-(Negative)”, ”BBB-(Negative)”and “Baa3(stable)”ratings respectively. Besides, the Company obtained an issue specific credit rating of “BBB+(Stable)” from Japanese Credit Rating Agency in respect of its Samurai Bond issuance of March 2007. Each of the four credit ratings is equivalent to India’s sovesreign rating, and is investment grade.

Benefit to Investor

The Income by way of Interest on these Bonds is fully exempt from Income Tax as per provision under section 10(15) (iv) (h) of IT act.